Law: Income Tax Act, 1922

Section: 66

Indian Income Tax Act. 1922 (X I of 1922)-Section 66 -Reference to High Court -Appellate Tribunal-Practice and procedure-Doctrine of res judicata-Whether applicable to income tax proceedings-Held no- Question before Tribunal whether transaction was in the nature of trade- Tribunal not applying its mind to the facts of the case-Decision on the basis of earlier year- Whether Tribunal should be directed to re-hear the case-Held yes. The principle of res judicata does not apply to income tax proceedings. Therefore, where the question before the Appellate Tribunal was whether the sale of mines and mining rights by the assessee amounted to an adventure in the nature of trade and the Tribunal did not state the facts in the statement of case and did not discuss them in its order but answered the question in the negative merely by following an earlier decision of the Tribunal with regard to an earlier assessment year. Held, that the question whether a transaction is or is not in the nature of trade is a question of law the answer to which depends on the total impression and effect of all the relevant facts and circumstances that are brought on the record by the income tax authorities and that the Tribunal had misdirected itself in law on the merits and that the matter had to be sent back to the Tribunal for its decision on the merits of the case on any additional evidence that might be adduced by the revenue and the assessee. CIT v. George Henderson & Co, Ltd. [1967] 66 ITR 622 (SC) and Raghunath Prasad Poddar v. CIT [1973] 90 ITR 540 (SC) followed. Cases referred to; Ahmed Alladin (Khan Bahadur) &Sons v. CIT [1968] 68 ITR 573 (SC). CIT. V, Calcutta Discount Co. Ltd. [1973] 91 ITR 8 (SC). CIT v. Chrestian Mica Industries Ltd. [1977] 109 ITR 324 (Cal). CIT v. Das (A.K.) (19701 77 ITR 31 (Cal). CIT v. Indian Woollen Textiles Mills (1964) 51 ITR 291 (sc). CIT v. Kamal Singh Rampuria (1970) 75 ITR 157 (SC). CIT v. Kharwar (B.M) (1969) 72 ITR 157 (SC). CIT v. Mugneeram Bangur & Ca. [1963] 46 ITR 565 (Cal). CIT v. Rajasthan Mines Ltd. [1970 78 ITR 45 (SC). Hooghly Trust (P) Ltd.v CIT [1969] 75 [TR 685 (SC). India Cements LTD. v. [1966] 60 ITR 52 (SC). Jankiram…

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